Pepkowski v. Life of Indiana Ins. Co., 64S04-8903-CV-250

• Decision Date: 28 March 1989
• Docket Number: No. 64S04-8903-CV-250,64S04-8903-CV-250
• Citation: 535 N.E.2d 1164
• Parties: Kim PEPKOWSKI, Appellant (Plaintiff Below), v. LIFE OF INDIANA INSURANCE COMPANY; Quinet Life and Casualty Corp.; Donald Webber Mortgage Company; and Michael Wytrykus, Appellees (Defendants Below).
• Court: Indiana Supreme Court

Page 1164

535 N.E.2d 1164

Kim PEPKOWSKI, Appellant (Plaintiff Below), v. LIFE OF INDIANA INSURANCE COMPANY; Quinet Life and Casualty Corp.; Donald Webber Mortgage Company; and Michael Wytrykus, Appellees (Defendants Below).

No. 64S04-8903-CV-250.

Supreme Court of Indiana.

March 28, 1989.

Richard A. Miller, Gouveia & Miller, Merrillville, for appellant.

Thomas C. Hays, Steven H. Johnsonbaugh, Lewis, Bowman, St. Clair & Wagner, Indianapolis, John McCrum, Eichhorn, Eichhorn & Link, Hammond, for appellees Life of Indiana Ins. Co. and Quinet Life and Cas. Corp.

William J. Moran, Highland, for appellees Donald Webber Mortg. Co. and Michael Wytrykus.

DICKSON, Justice.

Plaintiff-appellant Kim Pepkowski appealed from the trial court's grant of summary judgment motions favoring the defendants. The Court of Appeals reversed. Pepkowski v. Life of Indiana Ins. Co. (1988), Ind.App., 526 N.E.2d 1015. Petitions to transfer were filed by all defendants. Transfer is now granted.

The first count of plaintiff's two-count complaint seeks damages from all defendants resulting from the denial of her claim for hospitalization and medical insurance benefits under a group insurance contract issued to plaintiff, as an employee of defendant Donald Webber Mortgage Company (Webber). The second count, alleging retaliatory discharge, sought damages from Webber only.

Without issuing separate findings, the trial court generally granted the motion for summary judgment filed by Quinet Life and Casualty Corp. (Quinet) and Life of Indiana Insurance Company (Life of Indiana).

In granting the motion for summary judgment filed on behalf of Webber and Michael Wytrykus, an employee of Webber, the trial court made express findings relating solely to count I of plaintiff's complaint. While denying plaintiff's subsequent motion to correct errors, the trial court amended its judgment to further find the plaintiff to be an employee at will subject to discharge by Webber, thus addressing count II. In her appeal to the Court of Appeals, the plaintiff questioned the summary judgments as to both counts of her complaint. Discussing only the issues pertinent to count I, the Court of Appeals reversed, finding that summary judgment was "improvidently entered."

When the plaintiff was first employed by Webber, September 3, 1985, she was covered by a private health insurance policy due to terminate at the end of September. Webber had a group insurance policy plan with Life of Indiana, which was administered by Quinet. The policy provided that an employee who had worked at Webber for 30 days and who was accepted for enrollment by Life of Indiana was eligible for coverage on the 15th day of the month following an initial 30-day waiting period, which began running on the first day of employment. Eligibility for coverage was based on the acceptance of an employee's application and the payment of the premium.

When the plaintiff inquired as to Webber's insurance coverage, she was referred to Wytrykus. Wytrykus helped the plaintiff complete an application, gave her a booklet detailing the policy benefits, and sent her application to the insurance company. She alleges that Wytrykus told her that the insurance coverage would begin October 1, 1985. In reliance thereon, plaintiff terminated her private insurance coverage. On October 9, 1985, plaintiff was seriously injured in an automobile accident. Her claim for benefits was thereafter denied by Life of Indiana and Quinet on the basis that her coverage did not begin until October 15, 1985.

In count I of her complaint, plaintiff sought to avoid the 30-day waiting period language, asserting her detrimental reliance on Wytrykus's assurances of the earlier coverage date, along with other facts. We agree with the determination by the Court of Appeals that an issue of material fact existed as to plaintiff's knowledge of the effective coverage date. However, we do not agree that summary judgment was thereby improper.

Any liability of Life of Indiana and Quinet derives solely from plaintiff's contention that Wytrykus acted as their agent. Neither Life of Indiana nor Quinet made any false representations concerning the coverage date. Plaintiff's information about the group policy came from Wytrykus. Wytrykus was employed by Webber, and not by Life of Indiana nor Quinet. Wytrykus had never sold insurance for Life of Indiana or Quinet, nor received any compensation from them. While further noting plaintiff's testimony that she believed Wytrykus was Webber's agent and not an agent of Life of Indiana, the Court of Appeals found genuine issues of material fact precluding summary judgment on the agency issue. We disagree.

The party opposing summary judgment is "obliged to disgorge sufficient evidence" to show the existence of a genuine triable issue. Hinkle v. Niehaus Lumber Co. (1988), Ind., 525 N.E.2d 1243, 1245-46 (quoting Shideler v. Dwyer (1981), 275 Ind. 270, 290, 417 N.E.2d 281, 293). The party opposing summary judgment must "come forth with specific facts showing that there is a genuine issue for trial." Hinkle, 525 N.E.2d at 1246 (quoting Criss v. Bitzegaio (1981), 420 N.E.2d 1221, 1223).

Apparent authority is the authority that a third person reasonably believes an agent to possess because of some manifestation from his principal. Warner v. Riddell Nat'l Bank (1985), Ind.App., 482 N.E.2d 772, 775. See also Grosam v. Laborers' Int'l Union of N. Am. (1986), Ind.App., 489 N.E.2d 656, 658. The necessary manifestation is one made by the principal to a third party, who in turn is instilled with a reasonable belief that another individual is an agent of the principal. Swanson v. Wabash College (1987), Ind.App., 504 N.E.2d 327, 332; Storm v. Marsischke (1973), 159 Ind.App. 136, 304 N.E.2d 840, 842; Kody Eng'g Co. Inc. v. Fox & Fox Ins. Agency Inc. (1973), 158 Ind.App. 498, 505-06, 303 N.E.2d 307, 311. It is essential that there be some form of communication, direct or indirect, by the principal, which instills a reasonable belief in the mind of the third party. Swanson, 504 N.E.2d at 332; Storm, 304 N.E.2d at 843. Statements or manifestations made by the agent are not sufficient to create an apparent agency relationship. Swanson, 504 N.E.2d at 332; Storm, 304 N.E.2d at 843.

The plaintiff asserts that the following facts created a genuine issue for trial with regard to agency: Wytrykus provided the application form and benefits booklet; he assisted the plaintiff in completing the form and mailed it directly to Life of Indiana and Quinet; the plaintiff was not contacted by any other insurance agent regarding her coverage; and Life of Indiana and Quinet accepted the application. Thus, the only "manifestations" by Life of Indiana and Quinet are their permitting Wytrykus to possess their application form and benefits booklet and their accepting the application. These acts are not a sufficient manifestation to clothe Wytrykus with apparent authority to bind Life of Indiana and Quinet. The trial court correctly entered summary judgment for Life of Indiana and Quinet on the agency issue because Pepkowski did not adequately set forth specific facts...